Chime has launched Chime Invest, an investment platform that allows members to buy U.S. stocks and exchange-traded funds or use professionally managed portfolios directly through the Chime app.
The new service brings investing into the same app members use to receive paychecks, spend money and manage savings. General access to Chime Invest will roll out over the coming weeks.
Members can begin investing with as little as $1, and there are no account minimums. Chime said the product is intended to make investing more accessible to consumers who may lack the time, experience or available capital to begin using a traditional brokerage or financial advisor.
Chime Invest offers managed portfolios and self-directed investing through the same investment account.
The managed portfolio option is designed for members who prefer to have investment decisions handled for them. Users select a portfolio based on their financial goals and risk tolerance, while Atomic Invest manages the underlying investments.
Atomic Invest is registered with the U.S. Securities and Exchange Commission as an investment advisor. The portfolios are diversified across multiple investments to help reduce the risks associated with placing money in a small number of individual stocks.
Management fees vary based on a member’s Chime plan. Chime Prime members pay no management fee, while Chime Plus members pay an annual fee of 0.10% of assets in the managed portfolio. Other Chime members pay an annual management fee of 0.25%.
Under the self-directed option, members can select and purchase from a broad range of U.S. stocks and ETFs without paying trading commissions.
ETFs are investment funds that generally hold collections of stocks, bonds or other assets and trade on exchanges like individual shares. They can provide investors with broader diversification than purchasing a single company’s stock.
The launch expands Chime beyond its core spending and savings products. Chime said members now have access to commission-free investing, managed portfolios and savings accounts offering annual percentage yields of up to 3.75% through one app.
Chime positioned the product as a way to help members move from saving money toward long-term investing. The company said the average Chime member opens the app five times per day and completes more than 50 transactions per month.
By placing investment tools within an app that members already use frequently, Chime aims to reduce the friction associated with opening and managing a separate brokerage account.
The company cited survey findings showing that prospective investors are often discouraged by a lack of time to learn about financial markets, more immediate uses for their money and the perceived cost of professional advice.
Chime also noted that approximately 40% of Americans report owning no stocks, leaving a substantial group of consumers without exposure to public equity markets.
Securities held in Chime Invest accounts are protected by the Securities Investor Protection Corporation for up to $500,000, subject to applicable limits and conditions. SIPC protection applies if a brokerage firm fails and customer assets are missing, but it does not protect investors against declines in the value of their investments.
Investment products also carry market risk and are separate from federally insured bank deposit accounts. Members may lose money when stock or ETF prices decline.
KEY QUOTE:
“The hardest part of investing is often getting started and sticking with it. Millions of people already trust Chime with their money every day. By bringing investing into the app they already know and love, we’re making it easier to turn saving into investing and investing into long-term wealth.”
Chris Britt, CEO and Co-Founder of Chime
